T-Mobile now is miles away from the company it was at the end of 2012. Revenue growth was at its worst point in years, and everyone but Magenta was selling the iPhone. Fast forward a year or so, and it’s all changed. Revolutionary changes to the U.S. carrier model transformed Tmo in to the most talked about network operator in the business. Considering it’s still the #4 carrier in the States in terms of subscriber base, that’s no mean feat.

UBS put together a chart that compares the 4 major U.S. carriers’ performances over the past couple of years. Specifically, comparing service revenue growth. Service revenue is the money generated by the company, growth of said revenue is simply what it says: The growth, or reduction of that revenue.

Take a look:

At the end of 2012, T-Mobile was down at -9.8%. In the space of 12 months, it got its growth back up to -1.1%. And while it’s still in the negative, that’s a growth of 8.5% in 52 weeks. No other company has grown that much in the same time frame. In fact, AT&T has been hovering at the 4% mark, Verizon at 8%-ish, while Sprint is flatlining at approx 0.5%.

What it shows on an industry scale is that even though the trend of 2013 was that the service revenue wasn’t really growing, T-Mobile outgrew the industry and showed positive results.

On that note, it was also announced this morning that T-Mobile’s stock price target has been raised to $30 due to “undeniable positive changes” by Jeffries analyst, Mike McCormack.

“McCormack said, “Recent strategic actions by TMUS, together with operating momentum exiting 2013, provide reason to be more optimistic. Pricing actions, plan changes, and the factoring of receivables suggest a more disciplined approach with an eye towards managing cash flow. Nevertheless, we continue to see risks to the story. In addition, device financing and receivables factoring makes comparability with Street estimates, and among carriers less meaningful.”

This comes on the back of news that T-Mobile’s valuation was recently raised to around $49 billion. $9 billion more than it was going to sell to AT&T for in 2011.

About Cam Bunton

Cam Bunton, Managing Editor. A film school graduate from the University of Cumbria, UK, Cam's past life was in mobile phone retail. His passion for cell phones got him in to that industry, and then in to this one. A family man with three kids, he somehow manages to balance his work duties with family life and a runaway Twitter addiction. Follow him on twitter: @CamBunton

Keep it up T-Mobile and maybe u could buy sprint instead lol jk. Maybe be a independent company improving the network,upgrading the 2g towers, get more coverage. Way to go tmobile.

Paul

Glad to see that the value of the new and improving Magenta. Keep the forward motion!

fsured

Who ever made that chart at UBS needs to take a class in how to present
information. Amateur move to have two of the four companies being
compared, displayed with either an identical color or very similar
shade. It’s hard to tell which company is which if you didn’t have
knowledge of the industry to know Sprint is taking a pounding right
now.

Cam Bunton

I know. I thought the exact same thing.

john

“…that’s a growth of 8.5% in 52 weeks. No other company has grown that much in the same time frame.”
100% false. The chart does not say that T-Mobile has grown, simply that it is not shrinking as fast as it was. Meanwhile, it does say that the other carriers have actually experienced growth. Even Sprint’s small positive growth is more growth than T-Mobile’s negative growth. That chart shows that T-Mobile had the potential to start growing, but it does not show they T-Mobile is growing now.

Cam Bunton

Going from -9.6 to -1.1 is still a change of +8.5. A bigger positive jump (perhaps using the term “growth” in that sentence was incorrect), than any other carrier. But it’s the only carrier to have significantly improved its revenue in that time.

21stNow

T-Mobile has the best recent trend according to the chart, but actual revenue growth is still not happening with T-Mobile. Verizon Wireless’ revenue grew by 8% from 3Q’13 to 4Q’13. T-Mobile’s revenue shrank by 1.1% over the same time period.

philyew

Take a look at the Q4 2013 earnings statement. It reports a small but consistsent INCREASE in service revenue between every quarter through 2013:

Q1 $5,106m
Q2 $5,122m
Q3 $5,138m
Q4 $5,169m

The reason the numbers in this chart are showing up as negative is because they are year-on-year changes. In Q4 2012 service revenue was $5,227m. The year-on-year comparison is therefore -1.1%.

Nevertheless, the overall trend in 2013 was GROWTH in service revenues.

21stNow

Thanks, I did it as quarter-over-quarter.

ETA: I removed the calculation from my previous post. I checked the investor report and saw that revenue decreased from 1Q’12 to 1Q’13, but all other 2013 quarters increased over 2012. I’m seeing different numbers than what you have for Q1’13 and Q2’13. I looked at page 18 of the document at the link below.

Yes, it was a hopelessly misleading chart and doing searches on the web for clearer information got nowhere. I suspected the numbers were year-on-year when I first looked at it, but had to go to the earnings statement for a clearer picture.

In fact, the growth in service revenue through 2013 was 0.6%. So although Cam was right that there is growth going on, it’s nothing like as much as this “growth” curve implies.

21stNow

I did an edit at the same time that you were typing; see my post above.

Off the top of my head, I’d say your numbers are TM without MetroPCS service revenue. The note at the bottom of the slide I referenced said the numbers for Q4 ’12, Q1 ’13 and Q2 ’13 were pro forma combined results.

I think UBS used the combined results, which would explain the -1.1% year-on-year comparison between Q4 ’12 and Q4 ’13.

fsured

Since T-Mobile is not improving service revenue by selling off assets, experiencing large customer growth, and increasing their revenue from what it was, I’d consider that growth. I was not a business but how does this not show the company is growing? Yes they are still in the negative range but in far better position than what they were in.

Perhaps the chart is simply intended to show the revenue point then compared to what is now and assums the reader knows all of the other factors at play. Everything combined is growing the company but chart is not mentioning this as it isn’t intended to. In this I can see the chart as misleading and shows the company is not shrinking as much.

21stNow

The revenue is not increasing, it is decreasing.

fsured

Maybe the key word in this chart is the “service”. Service wise they are experiencing a growth. When factoring in the expenditures to improve the network and other costs of Uncarrier, then yes total company revenue did decrease.

21stNow

Revenue never includes expenses. Income or loss nets the revenues against the expenses.

The chart above shows that revenue isn’t falling as fast as it was in the past. I put a chart below to illustrate this in hypothetical numbers.

philyew

They are back to growing quarter-to-quarter and did throughout last year after starting out down from Q4 2012 to Q1 2013.

Take a look at the Q4 2013 earnings statement. It reports a small but consistsent INCREASE in service revenue between every quarter through 2013:

Q1 $5,106m
Q2 $5,122m
Q3 $5,138m
Q4 $5,169m

The reason the numbers in this chart are showing up as negative is because they are year-on-year changes. In Q4 2012 service revenue was $5.227m. The year-on-year comparison is therefore -1.1%.

Nevertheless, the overall trend in 2013 was GROWTH in service revenues.

jdogs

Bro read the chart correctly. After losing all those customers by 2012 Q4, they have grown so much that it is an improvement. They are just still showing in negative because they are comparing it to how they were since 2011. Sucio

Aaron H

Looks like T-mobile will jump ahead of sprint by this next quarter if it continues to climb like it has the last 2 quarters.

Dakota

How much did getting the iPhone help?

Prox

I think it had more to do with no contract unlimited data. Most people who jumped on the post paid plan probably did so with cheaper android devices. This is all IMO.

Matt

I’m likely to agree with this. The unlimited data plan with 5GB of hotspot brought me back to T-Mobile.

KingCobra

The iPhone did more to stop churn (losing existing customers) more so than attracting new ones. Before last year, the iPhone was the largest reason for people leaving T-Mobile for other carriers.

Fr0stTr0n

Who the hell doens’t know how to make a proper spreadsheet chart? My God people….

KingCobra

I knew I should’ve bought in during the IPO last year.

GinaDee

The key is: Will the momentum continue or will 2013 just be a one hit wonder?

Not sure what quiet means to you, CES just passed with the well known Legere getting kicked out (Jan2014), T-mobile Concert followed after that, then announcements at MWC as well as new data tier (additional data for the 1st 3 tiers and additional $10 for the unlimited data plan), they’ve also recently announced plans to convert select 2G areas to LTE by end of 2014.

That’s a busy first 3 months in my opinion…

GinaDee

That was January.

We’re going into April.

I’m not talking about gaffe’s or F-bombs on Twitter or CSPAN.

TBN27

The upgrading of the network from 2G to 4G LTE will prolong the momentum

Abe_The_Babe

Who was the genius who made Sprint and AT&T the same color on the chart? How difficult is it to use the company colors?

Really great news for T-Mobile. Hope they keep it up and continue to rapidly expand their network. That’s their only hope if they want to keep those customers.

Durandal_1707

Hey, to someone (like me) who suffers from red-green colorblindness, pretty much *every* line chart looks like that. It’s only fair that the rest of you guys have to deal with this once in a while too.

Abe_The_Babe

No, that’s not fair. What would have been fair is you not having red-green color blindness.

Durandal_1707

If you couldn’t tell, I was being a bit tongue in cheek there.

I do hate line charts though. It’s pretty rare that I see one that I don’t have to resort to opening up Digital ColorMeter in order to interpret.

Abe_The_Babe

Ya I didn’t realize that from the text. Too bad man, that sucks.

fsured

Colorblindness is something that should be taken into consideration when making any chart or map that will be viewed by many people. The creator should not have used two identical/similar blues and could have also used symbology such as hatched/dotted lines to convey the different companies. That would allow people such as yourself to see four different lines and reference which one goes with which company.

The chart could have been meant as an internal UBS report for investors and not for general public release. That does not excuse the creator as their own staff still need to comprehend the chart but it may explain why it didn’t go through some sort of internal company publication review before release.

besweeet

Doesn’t matter. You’ll know which one is Sprint by the one that takes a dip, hehe.

dontsh00tmesanta

Im hoping it will continue as it has made the big guys change their tune somewhat. I hope this edge to lte/hspa thing is real then it may make them sweat a bit more. Im hoping someday ATT brings back unlimited….

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